Plaintiff Fuentes-Fernandez & Company, PSC (“FFC”) entered into a Teaming Agreement with defendant The Corvus Group, Inc. (“Corvus”) in 2014 so that the two companies could jointly submit a response to a particular Request for Proposal (“RFP”) issued by the Small Business Administration. The Teaming Agreement contemplated that if the bid succeeded, Corvus would be the prime contractor and FFC would have the opportunity to serve as a subcontractor or consultant, but the contract was ultimately awarded to another offeror.

In this case, plaintiff FFC claims that Corvus breached the Teaming Agreement and improperly used FFC’s proprietary information when it later submitted its own proposal in response to another RFP issued by the same agency. Compl. [Dkt. # 1] at 1. FFC, which was the incumbent on both projects, and which submitted its own solo proposal in response to the second RFP, is obviously disappointed that its joint bid with Corvus was unsuccessful, and that Corvus has now secured a contract that was previously FFC’s. It sued Corvus for breach of the Teaming Agreement, misappropriation of its trade secrets, and for other torts related to Corvus’s success on the subsequent bid. See Compl.

Defendant moved to dismiss the entire complaint for failure to state a claim. Def.’s Mot. to Dismiss [Dkt. # 11] (“Def.’s Mot.”). After the motion to dismiss was fully briefed, FFC filed a motion for leave to amend its complaint to add a claim of breach of fiduciary duty and to clarify a number of the allegations in the original complaint. Pl.’s Mot. for Leave to File Amended Compl. [Dkt. # 17]. (“Pl.’s Mot. to Amend”). The Proposed Amended Complaint focuses on the use of confidential information and eliminates the specific performance and breach of contract claims predicated on any continuing validity of the Teaming Agreement. The revised lawsuit is premised on FFC’s contention that Corvus would not have been able to submit a competitive proposal on the subsequent RFP had it not made improper use of the confidential information it received when it teamed with FFC. Compl. ¶¶ 65, 70; Proposed Am. Compl. [Dkt. # 17-1] ¶¶ 65, 70. In the original complaint, plaintiff alleged that Corvus was contractually bound by the Teaming Agreement to team with FFC on the second procurement, and it sought specific performance and compensatory damages for the lost opportunity. Compl. ¶¶ 84–85.

But the proposed amendments do not eliminate the deficiencies in the complaint, so the motion for leave to amend will be denied on futility grounds, and the motion to dismiss will be granted. Plaintiff’s conclusory allegations that its trade secrets have been misappropriated do not survive the test to be applied when a court considers a motion under Rule 12(b)(6), and neither the claims set forth in the proposed amended complaint nor those in the original complaint state a claim upon which relief can be granted. The Court emphasizes that this ruling is founded upon a close reading of the Teaming Agreement, the two complaints, and the applicable legal authorities, and it is not premised upon defendant’s allegations of bad faith.[1]

BACKGROUND

FFC is a government contractor that provided services to the SBA relating to three risk oversight programs. Compl. ¶¶ 6–7. FFC is “in the business of providing financial services to its clients” such as “auditing, consulting, taxes, and other services.” Id. ¶ 12. In March of 2014, SBA held a “Pre-Solicitation Conference” in advance of soliciting bids for the “7a Guaranteed Loan Program.” Id. ¶¶ 6, 14; see also Ex. 2 to Compl. [Dkt. # 1-2][2] at 8 (SBA PowerPoint from the March 2014 meeting describing the program). The purpose of the conference was to “allow prospective bidders the opportunity to gain a better understanding of the objective of the solicitation, ” and to “offer[] SBA an opportunity to stress the importance of the significant elements of the Request for Proposal.” Compl. ¶ 21; Ex. 2 to Compl. at 6. FFC was the incumbent contractor for the program, and both FFC and Corvus attended the March 2014 meeting. Compl. ¶ 6.

Two months later, FFC agreed to meet with Corvus to discuss a potential teaming agreement to bid on the RFP discussed at the March 2014 meeting together. Compl. ¶¶ 8, 25, 27.[3]On May 9, 2014, they entered into the contract at the heart of this case, entitled “Teaming Agreement.” Compl. ¶¶ 31, 33; Ex. 5 to Compl. [Dkt. 1-7] (the “Agreement” or “TA”). The Agreement stated that the SBA had “issued a Request for Proposal, RFP Number SBAHQ-14-R-0003 . . . for SBA 7A Risk Oversight Support Services (“the Program”), ”[4] and that the parties sought to enter into an arrangement for the preparation and submission of a proposal. TA Recitals ¶¶ A–B. The Teaming Agreement contemplated that if Corvus was selected by the SBA as the prime contractor on RFP-3, and if the “perform anc e thereof require[d] the services of [a subsidiary] as set forth in the proposal, ” Corvus would “offer to [FFC] a subcontract for such services and the parties [would] in good faith negotiate a mutually acceptable subcontract for such services.” TA ¶ 2. The contract contains a termination provision in which the parties agreed that the Teaming Agreement would terminate upon notice that RFP-3 had been awarded to another contractor. TA ¶ 3(B). The Agreement was also explicit about its scope: “[t]his Agreement shall relate only to the Program specified herein, and nothing herein shall be deemed to . . . confer any right or impose any obligation or restriction on either party with respect to any other program . . . .” TA ¶ 7(A).

The Teaming Agreement contained several other provisions relevant to this litigation. First, the Agreement contained a non-solicitation provision: both parties agreed that, for a period of one year following the termination of the Agreement, neither would “actively solicit, employ or otherwise engage any of the other party’s employees (including former employees) who were involved in the proposal.” TA ¶ 11. The Agreement also included two provisions related to proprietary information: the parties agreed in paragraph 4 to keep any proprietary information exchanged in the performance of the agreement confidential and to use it only in connection with their obligations under the agreement, and in paragraph 12, they defined “confidential information, ” and each agreed not to disclose or use confidential information received from the other for its own use for a period of two years. Id. ¶¶ 4; 12(B), (E), (K).[5]

On September 22, 2014, the parties received a Notice of Award announcing that the contract had been awarded to another bidder. See Ex. 10 to Compl. [Dkt. # 1-10]; Compl. ¶ 56 (alleging that the contract for the 7a Program was awarded to Garcia & Ortiz, P.A.). But while that solicitation was still pending, on July 8, 2014, the SBA issued another RFP – for its “Safety and Soundness Loan Risk Oversight” program: solicitation number “SBAHQ-14-R-0016.”[6] Ex. 8 to Compl. [Dkt. # 1-8]; Compl. ¶ 47. Corvus submitted an offer in response to RFP-16 on or before November 14, 2014, see Proposed Am. Compl. ¶ 75, [7] and on March 11, 2015, Corvus was awarded the contract on RFP-16. Compl. ¶¶ 67–69; Ex. 12 to Compl. [Dkt. # 1-12].[8]

Plaintiff FFC filed this lawsuit on May 20, 2015. The five-count original complaint alleged that Corvus misappropriated the trade secrets FFC divulged for the purpose of preparing a joint proposal in response to RFP-3 and used them in violation of the contract to respond to RFP-16 and win other SBA business. See, e.g., Compl. ¶¶ 65 (alleging that “Corvus could not have submitted a competitive proposal for the SBA’s Safety and Soundness Program without utilizing the confidential and proprietary information, including pricing, provided to it by” FFC). It also asserted that Corvus was still bound by the Teaming Agreement, and that it was required to utilize FFC as a subcontractor on the contract it won on its own. Compl. ¶ 85. Count I demanded specific performance: FFC asked the Court to order Corvus to “negotiate a mutually acceptable subcontract” for RFP-16 because Corvus was still bound by the Agreement to team with FFC. Compl. ¶¶ 76–85; see TA ¶ 2. Count II also alleged that Corvus breached the Teaming Agreement in obtaining the contract for the second program on its own, and FFC asked for damages to compensate for the lost subcontract to which it claimed to be entitled. Compl. ¶¶ 86–89. Count III alleged fraud in the inducement of the contract; it asserted that Corvus represented that it would keep FFC’s proprietary information confidential and that it would negotiate a subcontract with FFC in good faith if it was the successful bidder, and that Corvus did not intend to, and ultimately did not, abide by those promises. Id. ¶¶ 90–103. Count IV alleged unfair competition and misappropriation of trade secrets. Id. ¶¶ 104–106. Finally, Count V sought injunctive relief:[9] it alleged that Corvus intends to solicit and hire an FCC Project Manager, Frederick Babb, to work on RFP-16, and it asked the Court to prohibit Corvus from doing so on the grounds that it would violate the non-solicitation clause of the Teaming Agreement. Id. ¶¶ 107–112.

On July 31, 2015, defendant Corvus moved to dismiss on the grounds that the complaint failed to state a claim upon which relief could be granted, pursuant to Federal Rules of Civil Procedure 12(b)(6) and 9(b). Def.’s Mot. Corvus argued that the Teaming Agreement terminated when the SBA selected another offeror in connection with RFP-3, and that it had no contractual obligations to plaintiff in connection with RFP-16. Id. at 8–10. It also maintained that the claims based upon a breach of the confidentiality provisions of the agreement were entirely conclusory, and it proffered evidence of its own to show that plaintiff’s claims were implausible.[10] In response, FFC voluntarily withdrew the specific performance count (Count I). Pl.’s Notice of Partial Voluntary Dismissal [Dkt. # 14], but it otherwise opposed the motion. Pl.’s Opp. Defendant replied in support of its motion on September 14, 2015. Def.’s Reply in Supp. of Def.’s Mot. [Dkt. # 16] (“Def.’s Reply”).

Then, on September 23, 2015, plaintiff filed a motion for leave to file an amended complaint, which was submitted as an exhibit to the motion. Pl.’s Mot. for Leave; Proposed Am. Compl. FFC proposes to make several changes to the complaint: the specific performance count is omitted, and a claim of breach of fiduciary duty has been added. Proposed Am. Compl. ¶¶ 110– 114. According to plaintiff, the proposed amended complaint “supplement[s] and clarifie[s]” its allegations regarding Babb’s relationship with FFC, see Proposed Am. Compl. ¶¶ 8, 116, 119, and its status as the incumbent contractor for RFP-3 and RFP-16. Proposed Am. Compl. ¶ 44. Plaintiff also maintains that the amendment adds “consistency on definitions and RFPs to which the facts refer, ” clarifies the allegations regarding defendant’s alleged use of its trade secrets, and provides “more information” on the damages resulting from Corvus’ conduct. See Pl.’s Mot. for Leave at 3. Notably, plaintiff no longer alleges that it was a breach of contract for Corvus to submit an offer in response to RFP-16 by itself; the proposed amended complaint is predicated solely on the theory that Corvus could not possibly have put together a successful proposal on its own without relying upon FFC’s proprietary information, including pricing, that had been disclosed under the Teaming Agreement.

Defendant opposed plaintiff’s motion for leave to amend its complaint on October 9, 2015, arguing both that amendment would be futile, and also that FFC’s motion was brought in bad faith, Def.’s Opp. to Pl.’s Mot. for Leave [Dkt. # 21] (“Def.’s PAC Opp.”), and plaintiff replied. Pl. FFC’s Reply to Def.’s PAC Opp. [Dkt. # 23] (“Pl.’s PAC Reply”).

During the Court’s review of the matter, it noticed that that paragraph 20 of the Teaming Agreement provided that “[t]he parties hereby submit to the exclusive personal and subject matter jurisdiction and venue” of the “State or Federal Courts located in Chicago, Illinois.” See TA ¶ 20. The Court ordered the parties to brief the issue of whether venue was proper in this district in light of that provision. See Min. Order (Dec. 21, 2015). The parties jointly replied that the forum selection clause did not limit this Court’s jurisdiction, and, in any event, both parties waived any objection to venue in this jurisdiction. Joint Mem. on Venue [Dkt. # 24] at 2, citing Atl. Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Tex., 134 S.Ct. 568, 577 (2013).

STANDARD OF REVIEW

I. Motion for Leave to Amend

When a party seeks to amend its pleading after a responsive pleading has been served, the Court should “freely give leave [to amend] when justice so requires.” Fed.R.Civ.P. 15(a)(2); see Firestone v. Firestone, 76 F.3d 1205, 1209 (D.C. Cir. 1996). When evaluating whether to grant leave to amend, however, the Court must consider these factors: (1) undue delay; (2) prejudice to the opposing party; (3) futility of the amendment; (4) bad faith; and (5) whether the plaintiff has previously amended the complaint. Atchinson v. District of Columbia, 73 F.3d 418, 425-26 (D.C. Cir. 1996), quoting Foman v. Davis, 371 U.S. 178, 182 (1962). The Court may deny leave to amend based on futility if the proposed claims would not survive a motion to dismiss. Rumber v. District of Columbia, 598 F.Supp.2d 97, 102 (D.D.C. 2009), citing James Madison Ltd. v. Ludwig, 82 F.3d 1085, 1099 (D.C. Cir. 1996).

II. Motion to Dismiss

“To survive a [Rule 12(b)(6)] motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible when the pleaded factual content “allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 678, citing Twombly, 550 U.S. at 556. “The plausibility standard is not akin to a ‘probability requirement, ’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id, quoting Twombly, 550 U.S. at 556. A pleading must offer more than “labels and conclusions” or a “formulaic recitation of the elements of a cause of action, ” id, quoting Twombly, 550 U.S. at 555, and “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id, citing Twombly, 550 U.S. at 555.

When considering a motion to dismiss under Rule 12(b)(6), the complaint is construed liberally in the plaintiffs favor, and the Court should grant the plaintiff “the benefit of all inferences that can be derived from the facts alleged.” Kowal v. MCI Commc ’ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994). Nevertheless, the Court need not accept inferences drawn by the plaintiff if those inferences are unsupported by facts alleged in the complaint, nor must the Court accept plaintiffs legal conclusions. See id; see also Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002).

ANALYSIS

I. The Court will apply the law of Illinois ...

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